It was established in 1989 and has since become one of the world's most popular gay bars. Woody's is known to be Toronto's most popular gay hangout. It was said in the Toronto Star that "All roads lead to Woody's", and rumoured to have the highest beer sales of any bar, gay or straight, in Canada. Its success not only as a business but as a gay rights institution can be attributed to general managers Dean Odorico and Steven Clegg. The former was originally a bartender at a (previously defunct, but now resurrected) rival bar, The Barn Stables.

The North American version of the television show Queer as Folk featured the bar as its main queer hangout. Filmed in Toronto, the series was set in Pittsburgh, and the show would often film on the street outside the bar. Indoor scenes were shot on location in the first season, but a soundstage was later built. In a fourth-season episode of the series in which several of the characters travelled to Toronto, Woody's appeared both as Pittsburgh's "Woody's" and a Toronto bar called "Moosie's". Woody's was also the highlight of a skit on Late Night with Conan O'Brien.

Toronto's large gay community and the bar's worldwide exposure has made it an icon. Woody's operates with an adjacent bar known as Sailor. Woody's and Sailor appear to be separate establishments from the outside, but are connected inside. Woody's and Sailor are located at 465–467 Church St. Toronto, ON. Woody's hosts several "best" competitions - including "best chest" and "best ass" on various nights. These competitions are judged on popularity, with the contestant receiving the most applause crowned the winner. The top positions receive cash prizes and passes to local gay establishments, including dance clubs and bathhouses.